MM&HL Investment Committee Minutes 5/14/19
May 18, 2019Morrill Memorial and Harris Library Investment Committee
Minutes of May 14, 2019 Meeting
Present: Cindy Stableford, Betsy Ruml, John Hawkins, Rachel Kurland. Gretchen Rittenhouse was unable to attend.
Minutes of the 1/15/19meeting were approved.
Rachel provided an update report for the Library Trustees:
The Trustees have been dealing with two unexpected problems this spring: flooding in the basement and the need for a new septic system. It is not clear how much (if any) of the cost of cleaning up the flooding will be covered by insurance. It is also not yet known what type of new septic system the Library will be allowed to install. Testing is now underway to determine what the choices are. It is clear that significant funds will be needed but neither the amount nor the timing is known at this time.
The Library has about $25K in their checking account in addition to the $25K recently invested in CDs at Vanguard. The Trustees do not know at this time whether they will need to withdraw any of their possible distribution from the Endowment Account.
Cindy reported for the Friends:
The Friends sent out their annual fundraising letter last week and have had a good early response. They will meet on June 4 and will vote on making their annual contribution to the Endowment then. They are getting ready for the book sale in July.
Report from the Chair (Cindy):
The transfers approved at the last meeting were executed: $85.76 was transferred to the Library from the Swan/Downer/Ordway Funds and $6,500 was transferred from the Federal Money Market Fund to the Intermediate Term Bond Fund (VBTLX).
We assisted the Library by using our Vanguard account to buy 2 CDs, totaling $25K. These funds may be needed to cover capital expenses related to the flooding and septic repair described above.
At the last meeting we discussed whether our distribution formula is working as intended - i.e. to allow the corpus of the endowment to grow at the rate of inflation, even after distributions. Cindy presented a revised version of our distribution spreadsheet to help us monitor this. It was agreed that this was helpful and that she would add another column showing the annual inflation rate for reference.
Betsy reviewed the portfolio:
1) Overall, the portfolio is up since year end – 12.49% as of May 3, and 9.2% as of May 14. All asset classes have recovered from the Q4 2018 downturn.
2) Currently 66% equity (stocks and REITS)/34% FI, staying close to our target allocation is 65/35. Our portfolio “styles” look balanced, so no need to move funds around.
3) In order to simplify the number of funds owned, we decided to exchange our positions in the Vanguard Mid-Cap Index Fund (VIMAX) and the Vanguard Small-Cap Index Fund (VSMAX) for a position in the Vanguard Extended Market Index (VEXAX), which includes both mid and small market sectors.
The meeting was adjourned. Next meeting is scheduled for Tuesday, January 14, 2020 at 9AM at the Library.
Respectfully Submitted,
Elizabeth Ruml
on behalf of Gretchen Rittenhouse, Secretary
Posted by Morrill Memorial & Harris Library.
